Question

Should cities have unlimited discretion to tax items in order to raise revenue for public services? (e.g., cigarette or soda tax to pay for schools?) What are the practical realities that prohibit this from occurring?)

Answer 1

Cities should have unlimited discretion to tax items in order to raise revenue for the public services.

The options available to local officials in governing, managing their finances and raising revenues to provide services needed by their communities are limited.

Practical realities that prohibits this from occuring are-

The Legislature has enacted many complicated changes in state and local revenues over the past 30

years. Voters have approved state constitutional protections limiting many of these actions at times

followed by even more complicated maneuvers by the Legislature in efforts to solve the financial

troubles and interests of the state budget

The measures that prohibit the state from occuring these are:

• Enacting most local government mandates without fully funding their costs. The definition of

state mandate includes a transfer of responsibility or funding of a program for which the state

previously had full or partial responsibility.

• Reducing the local portion of the sales and use tax rate or altering its method of allocation,

except to comply with federal law or an interstate compact.

• Reducing the combined share of property tax revenues going to the county as well as cities and

special districts in a county.

• Borrowing, delaying or taking motor vehicle fuel tax allocations, gasoline sales tax allocations,

or public transportation account funds.

Note-

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